Welcome to Kungsleden First quarter Thomas Erséus, Chief Executive Johan Risberg, CFO

Transcription

1 Welcome to Kungsleden First quarter 2012 Thomas Erséus, Chief Executive Johan Risberg, CFO

2 Owning and managing properties with satisfied customers

3 Always open to new opportunities regardless of property type or geography

4 High and stable returns for the long term with risk diversification as a key ingredient

5 A quality portfolio with good returns Industrial/war ehouse SEK 6,236 m Retail SEK 2,113 m 317 wholly owned properties, SEK 15,533 m Other SEK 1,477 m Office SEK 4,172 m Modules for schools, pre-schools, offices and portable units Nordic Modular SEK 1,535 m.

6 Strong gross profit for the first quarter 2012 Net sales increased by 36% to SEK 556 (407) m Gross profit increased by 47% to SEK 335 (228) m Profit before tax was SEK 458 (492) m and after tax SEK 113 (406) m. The profit decrease is largely due to provisioning for tax rulings and lower profits from Hemsö Profit for calculating dividends was SEK 121 (78) m, or SEK 0.90 (0.60) per share Seven properties sold for SEK 230 (5) m with a profit of SEK 20 (3) m Syndicated loan replaced by a new SEK 4,500 m facility Kungsleden secured a 2nd place in the Great Place to Work survey

7 Post-balance sheet events In April, Kungsleden received two tax rulings from the Administrative Court of Appeal, where the Court found against Kungsleden. Profit for calculating dividends was charged with SEK 80 m, and the Income Statement was charged with a tax cost of SEK 260 m Remaining refinancing requirement for 2012 largely secured in April.

8 Profit for calculating dividends SEK m Gross profit Sales and administration costs Net financial position Sub-total Realised items Trading net on sale 20 3 Realised value changes, properties 27 - Deduction for deferred tax on sale -8 - Realised value changes, financial instruments -4-8 Realised items 35-5 Profit for calculating dividends from Hemsö Taxes payable Profit for calculating dividends

9 Unchanged net letting New contracts with annual rental value of SEK 37 m Economic occupancy levels of 89.1 (89.2)% Average remaining lease term 4.8 years Partnering with tenants to reduce environmental impact through lower energy consumption

10 Potential for to keep growing Since 2009, Hemsö has been owned 50:50 by Kungsleden and AP3. Hemsö owns, manages and develops premises for social services, with property value of over SEK 21 bn. The market for public properties is an estimated 90,000,000 sq.m. in Sweden; Hemsö s market share is about 1.7%. The largest tenants are Västra Götaland County Council, education company Academedia and healthcare provider Attendo.

11 Income Statement, Hemsö SEK m Rental revenues Property costs Gross profit Trading net - - Sales and administration costs Net financial position Unrealised value changes Profit before tax Tax Net profit

12 First quarter 2012 in figures

13 Transfer to new accounting method On 1 January 2012 the way Hemsö is consolidated changed from the proportional method to the equity method Half of Hemsö s profit or loss is recognised on a line in the Income Statement as profit/loss from participations in joint ventures Half of the value of Hemsö s equity is recognised as an asset on a separate line in the Statement of Financial Position This change does not affect equity, net profit or profit for calculating dividends Property values and loans become lower, reducing total assets and increasing the equity ratio

14 Income Statement SEK m Rental revenues Sales revenues, modular buildings Net sales Property costs Production costs, modules Increase mainly sourced from properties purchased in the past year Gross profit Trading net 20 3 Sales and administration costs Profit/loss from participations in Hemsö Net financial position Unrealised value changes, properties 1 27 Unrealised value changes, financial instruments Profit before tax Tax Profit after tax for the period

15 Income Statement SEK m Rental revenues Sales revenues, modular buildings Net sales Property costs Up 19% due to good order book at the Gråbo plant Production costs, modules Gross profit Trading net 20 3 Sales and administration costs Profit/loss from participations in Hemsö Net financial position Unrealised value changes, properties 1 27 Unrealised value changes, financial instruments Profit before tax Tax Profit after tax for the period

16 Income Statement SEK m Rental revenues Sales revenues, modular buildings Net sales Net sales increased by 36% Property costs Production costs, modules Gross profit Trading net 20 3 Sales and administration costs Profit/loss from participations in Hemsö Net financial position Unrealised value changes, properties 1 27 Unrealised value changes, financial instruments Profit before tax Tax Profit after tax for the period

17 Income Statement SEK m Rental revenues Sales revenues, modular buildings Net sales Property costs % increase due to purchases in 2011 Production costs, modules Gross profit Trading net 20 3 Sales and administration costs Profit/loss from participations in Hemsö Net financial position Unrealised value changes, properties 1 27 Unrealised value changes, financial instruments Profit before tax Tax Profit after tax for the period

18 Income Statement SEK m Rental revenues Sales revenues, modular buildings Net sales Property costs Production costs, modules Gross profit Trading net 20 3 Sales and administration costs Profit/loss from participations in Hemsö Net financial position Unrealised value changes, properties 1 27 Comparing sales proceeds to acquisition cost gives the effect of sales on profit for calculating dividends, which is SEK 39 m Value changes of SEK 27 m and deductions for deferred tax of SEK - 8 m are additional to the trading net of SEK 20 m Unrealised value changes, financial instruments Profit before tax Tax Profit after tax for the period

19 Income Statement SEK m Rental revenues Sales revenues, modular buildings Net sales Property costs Production costs, modules The increase is mainly a consequence of a larger property portfolio Gross profit Trading net 20 3 Sales and administration costs Profit/loss from participations in Hemsö Net financial position Unrealised value changes, properties 1 27 Unrealised value changes, financial instruments Profit before tax Tax Profit after tax for the period

20 Income Statement SEK m Rental revenues Sales revenues, modular buildings Net sales Property costs Production costs, modules Gross profit Trading net 20 3 Corresponds to 50% of Hemsö s profit after tax. The lower figure is mainly due to lower unrealised value changes on properties Sales and administration costs Profit/loss from participations in Hemsö Net financial position Unrealised value changes, properties 1 27 Unrealised value changes, financial instruments Profit before tax Tax Profit after tax for the period

21 Income Statement SEK m Rental revenues Sales revenues, modular buildings Net sales Property costs Production costs, modules Gross profit Trading net 20 3 Negative change mainly explained by higher loan volumes and higher interest margins than the loan portfolio Sales and administration costs Profit/loss from participations in Hemsö Net financial position Unrealised value changes, properties 1 27 Unrealised value changes, financial instruments Profit before tax Tax Profit after tax for the period

22 Income Statement SEK m Rental revenues Sales revenues, modular buildings Net sales Property costs Positive impact in the year from rising long interest rates. Production costs, modules Gross profit Trading net 20 3 Sales and administration costs Profit/loss from participations in Hemsö Net financial position Unrealised value changes, properties 1 27 Unrealised value changes, financial instruments Profit before tax Tax Profit after tax for the period

23 Income Statement SEK m Rental revenues Sales revenues, modular buildings Net sales Property costs Production costs, modules Lower profit mainly because of a provision for tax costs and reduced profits from Hemsö Gross profit Trading net 20 3 Sales and administration costs Profit/loss from participations in Hemsö Net financial position Unrealised value changes, properties 1 27 Unrealised value changes, financial instruments Profit before tax Tax Profit after tax for the period

24 New accounting method means reduced total assets SEK m ASSETS 31 Mar 31 Dec Goodwill Properties 14,627 14,788 Machinery and equipment Participations in Hemsö 1,167 1,084 Long-term receivables from Hemsö 1,500 1,500 Deferred tax asset 766 1,020 Other long-term receivables Non-current assets 18,715 19,051 Inventories Current receivables Assets held for sale properties Assets held for sale other assets Cash and bank balances Current assets 1,883 1,860 TOTAL ASSETS 20,598 20,911

25 New accounting method means reduced total assets SEK m EQUITY AND LIABILITIES 31 Mar 31 Dec Equity 7,828 7,719 Liabilities to credit institutions 8,037 8,154 Bond loans (unsecured) 1,599 1,599 Liabilities related to assets held for sale Interest-bearing liabilities 10,537 10,654 Provisions Derivatives 915 1,156 Other non interest-bearing liabilities Liabilities related to assets held for sale Non interest-bearing liabilities 2,233 2,538 TOTAL EQUITY AND LIABILITIES 20,598 20,911

26 Changed game plan for funding High turbulence on the financial markets driven by government finance turmoil mainly in Europe and the resulting low interest rates historically. Higher funding costs combined with more stringent capital adequacy requirements for banks resulted in rapid expansion of interest margins and poorer access to credit in the second half-year, in terms of volumes and maturities started with somewhat improved market sentiment and generally rising stock markets and yields. Markedly increased interest in alternative funding sources, especially bonds.

27 This year s refinancing requirement largely secured Syndicated loan rearranged with a new SEK 4,500 m facility in January The remaining refinancing requirement for 2012 has largely been secured Loans of SEK 1.6 bn extended, of which SEK 1.0 bn to 2015 and SEK 0.5 bn to 2013 In addition, definitive tenders secured on SEK 1,3 bn In total, Kungsleden has refinanced and secured definitive tenders for borrowings of SEK 7.4 bn

28 Maturity structure, fixed-interest periods As of 31 March 2012 Loan, SEK m ,541 Interest derivativ es, SEK m Ave. interest, % , , , , Ave. interest, loans and derivatives, years Average fixed interest term, years Total derivatives 10,541 11, Market value of loans and derivatives 904 Total 11,445

29 Maturity structure, credits As of 31 Mar 2012 Utilised credits, SEK m Un-utilised credits, SEK m Total credits, SEK m , , ,099 1,400 5, ,034-2, Total 10,541 1,660 12,201 Average conversion term, years Equity ratio 31 Mar 12 38% 31 Dec 11 37% 31 Mar 11 34% LTV ratio 68% 68% 75%

30 Tax part of a company s costs

31 The Swedish Tax Agency s new opinion has retroactive consequences The current taxation climate is different, and the Swedish Tax Agency has changed its view of past transactions. Last week, Kungsleden received two rulings from the Administrative Court of Appeal for the fiscal year 2005 which imply a negative liquidity effect of SEK 80 m and a tax cost of SEK 260 m that has been charged to profits for the first quarter Kungsleden will communicate potential tax rulings through press releases and make continuous updates on its tax position in the company s quarterly reports Kungsleden s view is that the company has fully complied with the laws and practice in place when submitting each tax return The company verifies its position with experts continuously

32 18 outstanding tax cases

33 Kungsleden s tax position Kungsleden has provisioned SEK 325 m as a tax cost A total of 18 tax proceedings are ongoing, of which 17 have not been taken up as income Given negative outcomes of all proceedings, the estimated: effect on equity would be approx. SEK 1,400 m (in addition to the SEK 325 m provisioned) liquidity effect would be approx. SEK 780 m Final outcome may be higher or lower

34 Total yield until the end of April 2012

35 10 largest shareholders represent 25% of votes & capital Nordea fonder 5.9 Länsförsäkringar fonder 3.0 Olle Florén and companies 2.5 Norwegian Government 2.4 SHB fonder 2.1 Pensioenfonds PGGM (NL) 2.1 Danske Invest fonder 2.0 AP4 1.8 SEB fonder 1.4 AP Source: SIS Ägarservice, 31 Mar 2012

36 Stable lettings market, more active tenants Kungsleden s lettings market Higher activity with more terminations and more new contract signings Unchanged net lettings Financial markets Market driven by shorter credits Higher capital adequacy requirements for banks Higher borrowing costs Transaction market The number of transactions fell by 40% in the first quarter despite high volumes Property market still liquid and transparent

37 Focus on management and portfolio enhancement in 2012 Quality portfolio with good geographical risk-spread ensures stable cash flow As always, focus on customer care, portfolio enhancement and reducing vacancies Extending the base of alternative types of funding and continued search for good transaction opportunities High employee commitment offers good prospects for good profits from property management and business development The Board s estimate of profit for calculating dividends for 2012 is SEK 550 m

38 Any questions?